The Navy could build a 355-ship fleet by 2030, but paying for such a force will require adding between $120 billion and $130 billion to the service’s funding over the next decade, Acting Secretary of the Navy Thomas Modly told lawmakers Thursday.

Assuming the Navy and Department of Defense receive flat topline budgets for the next decade, Modly estimates it will take between $12 billion and $13 billion in additional funding each year to pay for building, staffing, maintaining and sustaining a 355-ship fleet.

At the current funding level – a proposed $20-billion shipbuilding budget in Fiscal Year 2021 – Modly said, “we’re kind of tapping out at about 305 ships; that flatline can sustain that 305 ships.”

The Navy is conducting a Stem to Stern review to scour its budget for ways to cut spending on programs or staffing that are redundant or don’t fit with the core mission, and to apply these savings to shipbuilding, Modly said. The goal is to find about $8 billion in savings a year for the next five years, which will help but not entirely solve what he sees as a fundamental funding problem.

“I think ultimately we can dig deep and find something, but there’s going to have to be a broader discussion about a higher topline for the Navy,” Modly said.

“I am completely convinced that there’s money within our budget that could be spent a lot more efficiently – I’m talking about just the Navy budget – and we have to do the work to do that before we can convince anybody else above us to give us more in our topline,” he said.

Despite Modly’s optimism about accelerating the Navy’s shipbuilding rate, lawmakers were not convinced his plan was achievable. Several members of the panel pointed out the service has yet to release an updated 30-year shipbuilding plan based on the FY 2021 proposal.

As of now, all lawmakers have to reference is the five-year shipbuilding plan in the FY 2021 budget request, which includes cutting three ships from production and retiring four cruisers, four Littoral Combat Ships and three amphibious warships. In FY 2021, the Navy’s entire shipbuilding budget drops to $20 billion, a $4 billion decrease from what lawmakers approved for FY 2020.

“As I look at the numbers, the shipbuilding account is down about $4 billion from last year and the readiness, the [operations and maintenance] account for the Navy is up about $3.6 billion from last year,” Rep. Mac Thornberry (R-Texas), the top Republican on the committee, said in the hearing.

If the Navy’s emphasis is finding ways to fund expanding the fleet, Thornberry wanted to know why the FY 2021 request shifts money away from shipbuilding to pay for maintenance.

“It’s an intentional trade because our decision was at this particular time, because of the readiness hole we had fallen into over many, many, years, we had to address that,” Modly said. “That immediately impacts the safety and security of sailors and Marines on those platforms. We could not in good conscious trade that money for more ships if they could not operate properly.”

Several lawmakers were concerned with being asked to support a FY 2021 budget request that decreases the Navy’s shipbuilding budget without the benefit of seeing the Navy’s long-term shipbuilding strategy.

“It’s hard for us to give you money until we know your vision,” said Rep. Mike Gallagher (R-Wisc.).

As designed, the OFRP is a 36-month cycle built around maintenance and training for a seven-month deployment of a carrier strike group. The cycle also includes a sustainment period when a ship or strike group could redeploy or surge forward on short notice.

According to the OFRP, Luria said, ships should be deploying six out of every 36 months, or 17 percent of the time. The Navy instituted the OFRP to give crews more time to perform training and maintenance. Previously, ships deployed six out of every 24 months, or 25 percent of the time, she said.

“I’m not that smart with math, but I am a Navy nuke, and I can do the math backwards, and 355, if you do the math backwards, at 25 percent of the time you only need 282 ships to do the same thing presence-wise before you went down in the amount of time you are deployed,” Luria said. “So honestly, a force structure assessment and a 30-year shipbuilding plan that are based off of an assumption we’re only going to deploy 17 percent of the time, six or seven out of 36 months it doesn’t work.”

Modly pushed back, saying the Navy can have a 355-ship fleet by 2030.

“I think this is possible, and I mention it in the plan,” Modly said.

“So, it’s possible in the plan that we haven’t seen yet?” Luria asked. “It tells us how to get to 355 in a decade?”

Following up on Luria’s question, Smith advised Modly to focus less on a number and more on the capabilities of the future fleet.

“In the end, this budget submission is the manifestation of the hard choices we had to make this year,” Modly said.
“While this budget does slow our trajectory to a force of 355 ships or more, it does not arrest it. You can have my personal assurance we are still committed to building that larger, more capable, more distributed naval force within what I consider a strategically relevant timeframe of no more than 10 years.”

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About Ben Werner

Ben Werner is a staff writer for USNI News. He has worked as a freelance writer in Busan, South Korea, and as a staff writer covering education and publicly traded companies for The Virginian-Pilot in Norfolk, Va., The State newspaper in Columbia, S.C., Savannah Morning News in Savannah, Ga., and Baltimore Business Journal. He earned a bachelor’s degree from the University of Maryland and a master’s degree from New York University.